Government fast-tracks PIA privatization amid financial crisis
The interim federal government has taken decisive steps towards
the urgent privatization of Pakistan International Airlines (PIA) after the
Privatisation Commission (PC) declined further financial support for the
beleaguered national carrier.
In a meeting chaired by interim Prime Minister Anwaarul Haq Kakar,
the Privatisation Commission recommended expediting the privatization process
instead of allocating more funds to the financially troubled airline.
The meeting was attended by the newly appointed Federal
Privatisation Minister, Fawad Hasan Fawad, and the ministry's secretary, along
with officials from the PC, finance ministry, and the aviation secretary.
During the meeting, the aviation secretary informed the attendees
that restructuring PIA would require an additional eight to ten months and
proposed hiring a foreign consultant for assistance. To ensure the continuity
of PIA's operations, he emphasized the need for immediate funding.
Sources reveal that the interim prime minister endorsed the
Privatisation Commission's suggestion and directed Fawad Hasan to accelerate
the privatization process with urgency. Kakar stressed the inevitability of
privatizing the national airline promptly to enhance the quality of
international services for passengers.
Pakistan
International Airlines (PIA) to halt operations of several aircraft
In a related development, PIA has temporarily grounded aircraft
due to financial crunch. However, the airline clarified that these planes would
resume operations once payments are made to leasing companies.
As PIA grapples with a severe cash flow crisis, it has reportedly
been unable to disburse salaries to its employees for the month of August due
to the delayed release of funds by the federal government. The freezing of its
accounts by the Federal Board of Revenue (FBR) has further exacerbated the
airline's financial woes.
However, the finance ministry refuted media reports claiming that
the government had not provided financial support to PIA.
Recently, it was reported that PIA grounded multiple aircraft as
it sought funds to sustain operations in the coming months. The airline is
expected to sell non-core assets and primary functions during this period.
Last week, the aviation ministry informed the federal government
about PIA's dire financial situation, which had led to arrears with creditors,
aircraft lessors, fuel suppliers, insurers, and domestic and international
airport operators. Consequently, PIA had to ground five of its 13 leased
aircraft, with the possibility of four more facing a similar fate.
PIA’s
loss for the year increases to Rs67bn
The aviation ministry also reported that Boeing and Airbus were on
the verge of discontinuing the supply of spare parts by mid-month, prompting a
request for a Rs23 billion release, suspension of duties, taxes, and service
charges to domestic agencies.
On Wednesday, a Bloomberg report quoted PIA spokesperson Abdullah
Khan, who stated that the airline had canceled several domestic and
international flights after grounding at least five Airbus A320 planes. Khan
mentioned that PIA needed to immediately pay around $100 million to leasing
companies, airport authorities, and for aircraft spares.
According to Bloomberg's data, PIA's liabilities have surged to
Rs743 billion or $2.5 billion, exceeding its total assets by five times.
In a separate development, the Senate Standing Committee on
Aviation convened at Parliament House, Chairman Senator Hidayatullah called for
action against the PIA official responsible for leaking information about the
airline's affairs to the media. The committee also urged the media to exercise
responsible journalism when reporting on such matters.
The committee was briefed on the number of PIA employees, which
stands at 11,877, with 765 in regular positions and 183 on contracts. The
employees' performance is currently under evaluation.
Regarding overseas placements, PIA officials explained that
appointments were made to meet local needs, with a preference for Pakistani
nationals.
The committee was also informed about personnel stationed at various
locations and the European Union Aviation Safety Agency's (EASA) advisory
regarding flights passing over Lahore and Karachi. PIA officials confirmed that
the advisory had been resolved.
Source: Express Tribune